Accessibility links

Investors Not Flocking Into Zimbabwe Mines Sector - But Outlook Brighter

No major infusions of capital were announced Thursday at the conclusion of a two-day mining conference organized by the Zimbabwean government despite an assurance from President Robert Mugabe that Harare's fractious unity government is stable and from Prime Minister Morgan Tsvangirai that property rights will be respected under the new dispensation.

But Zimbabwe Chamber of Mines President Victor Gapare told Reuters that gold production in the country is expected to surge 50% this year to 4.5 tonnes from 3 tonnes last year.

At world prices just over US$1,000 an ounce, that would be worth some US$150 million and royalties to Harare at the current 3% rate would amount to some US$4.5 million.

Prime Minister Tsvangirai told foreign investors and other conference delegates that Harare will adopt “rational” mining royalties and taxes and cut bureaucratic red tape aiming to attract up to US$16 billion in new investment by 2018. He said Harare will review its Mines and Minerals Act this year and sign agreements with other countries as to investor rights.

The government has yet to revise 2008 legislation giving Harare the right to demand a 51% stake in any foreign-owned enterprise - in the mining sector in particular. The "indigenization" law was pushed through by Mr. Mugabe as a capstone to his land reform drive.

Correspondent Mark Peter Nthambe of VOA's Studio 7 for Zimbabwe reported from the Harare International Conference Center that Mr. Tsvangirai in his remarks to participants sought to reassure investors the rule of law would be respected - despite his recent vocal complaints that his governing ZANU-PF partners are not keeping their word.

But some international mining operators remain skeptical. Reuters quoted Rio Tinto executive Niels Kristensen, in charge of the resource giant's Zimbabwe diamond operations, as telling the conference that more needs to be done to relieve uncertainty about mining law, economic policies and marketing rules. Until then, Kristensen said, investors will be sidelined.

More reports from VOA's Studio 7 for Zimbabwe...